The National Pig Association (NPA) has warned that current low feed prices are doing nothing to reduce pig producers’ losses.

According to the NPA, nearly all producers are losing another £7 on every slaughter pig they produce as a result of buying wheat and soya forward last year, when it appeared prices had reached their lowest point.

“This is knocking a big hole in our British premium for higher-welfare pigs,” said NPA chairman Richard Lister. “It makes sense for pig-keepers to reduce risk by buying some feed forward when prices appear competitive — but it’s like taking a punt at Ladbrokes, and it’s painful when producers get it wrong.”

According to data produced on behalf of pig levy-payers, cost of production, based on spot feed prices, is currently 139p a kilo. This is 12p/kg above the average price received by producers which had fallen to 127p/kg, its lowest for eight years.

According to a new producer survey by NPA, 90% of respondents are paying at least 17% more for some of their feed ingredients.

This puts actual cost of production at 10p/kg above published figures due to the fact that feed represents 65% of the cost of production.

“Retailers and processors need to be aware of this, because we need their support,” said Lister. “If producers put maintenance, investment and even breeding herd replacement on hold, it is possible for some to show they are breaking even in cash terms.

“But it’s not a sustainable position and the only reason we aren’t seeing an exodus from the industry yet is that most producers cannot afford to quit, as the cull sow price has more than halved over the past 12 months.”

The survey also revealed that, of the 78% of respondents who took cover on soya last year, producers representing over 80% of sows are paying £11-£20 a tonne more than current spot prices for soya.

The NPA believes most British pig-keepers will be operating in the red for some or all of this year, as the European pig-cycle reaches its lowest point in more than half a decade, driven by higher output and compounded by Russia’s embargo on European Union pigmeat. It said British producers were making a loss on every pig they sold, but they were still better placed than their continental counterparts, as British pork attracts a 20p-30p/kg premium.

Some of this has been attributed to the strength of sterling versus the euro, a significant part is created by the British pig industry’s higher welfare husbandry, which is valued by retailers and consumers.

Seven supermarkets are classed as ‘NPA hundred-percenters’, as they continue to source 100% British fresh pork. These are Aldi, The Co-operative, Lidl, Marks & Spencer, Morrisons, Sainsbury’s and Waitrose.

“We’d like to remind all retailers that British pig producers have a worldwide reputation for their high welfare,” said NPA chief executive Dr Zoe Davies. “For instance, most continental pig producers still confine sows in steel gestation crates, or ‘stalls’, for part of the time, whereas they have been outlawed on British farms for 16 years.

“Producing high-welfare pigs outdoors or on straw carries a significant cost disadvantage and retailers must be mindful not to kill the golden goose. If they do, they will have let down their suppliers and they will have let down their customers who continue to demonstrate they want reasonably priced high-welfare, quality-assured British pork.”